 "Cement makers in Telangana rule out price cut")
Representatives of half a dozen cement companies led by Sagar Cements Limited joint managing director S Anand Reddy on Tuesday held a media conference to explain the reasons behind the recent increase in prices in the light of the purchase holiday declared by real estate developers accusing the former of artificially jacking up the prices.
Reddy said several cement manufacturers, including his company, had been running into losses for the last couple of years owing to a steep slump in demand and associated fall in prices. A couple of companies had already closed down their plants due to the losses, according to him.
“The price was never stable during the year either in the undivided AP or in other parts of the country and it had touched over Rs 300 in 2011-12 and 2012-13. The increase was influenced by the cost of inputs including coal and power that determine 80 per cent of the production cost,” Reddy said.
On builders’ demand for reduction in cement prices, Reddy said they had been asking for a price cut of Rs 40-45 per bag as they were bringing cement in bulk from the neighbouring Gulbarga cluster by paying just 2 per cent central sales tax (CST). “As the state loses heavily on VAT, we have represented with the government not to allow this to continue, Now, they want a similar price advantage on local procurement,” Reddy said.
Manufacturers said the average price of cement, including taxes and transportation, worked out at Rs 335 per bag. Being a limestone-rich region, the undivided AP emerged as a big cement surplus state in south India with an installed production capacity of close to 80 million tonnes as against the local consumption of around 22 million tonnes.
A top executive of My Home Industries Limited said close to 1 lakh tonnes of cement is being bought from Gulbarga cluster by the big builders by just paying 2% CST. There was no impact of the purchase holiday on local cement sales due to the same reason, he said.